Monday, March 22, 2010

Geithner Caught Breaking the Law Again at the NY Fed

Tax-evasion, covering up the fraudulent accounting of the banks he was supposed to be overseeing, lying under oath in front of Congress, and now warehousing junk loans at the NY Fed for Lehman - WHERE DOES IT END?  Here's the latest from the HuffPo: 
As Lehman Brothers careened toward bankruptcy in 2008, the New York Federal Reserve Bank came to its rescue, sopping up junk loans that the investment bank couldn't sell in the market, according to a report from court-appointed examiner Anton R. Valukas.  The New York Fed, under the direction of now-Treasury Secretary Tim Geithner, knowingly allowed itself to be used as a "warehouse" for junk loans, the report says, even though Fed guidelines say it can only accept investment grade bonds(HuffPo Link)
There you have it.  Geithner was aiding and abetting illegal activity and assisting Richard Fuld - who was a on the board of directors of the NY Fed at the time - in hiding the full extent of Lehman's insolvency.  Geithner should immediately be fired and all of his email accounts, phone records and files from the NY Fed and his office at the Treasury should be seized.  He needs to be investigated.

The other, bigger issue, as raised by the HuffPo article, is to what extent is the entire Federal Reserve system hiding toxic assets.  This isn't just related to Lehman and this is one of the main reasons that Bernanke and Geithner vigorously oppose all Congressional attempts to force an audit of the Fed (Bernanke's Fed is spending millions to fight this): 
Without an audit, the Fed is able to conceal the specifics of what it holds on its balance sheet. If the Lehman deal is any indication, the Fed is hiding billions of dollars in toxic loans on its books.  "The Fed legally is forbidden from taking such assets. There's a legal requirement that the Fed's assets be investment grade," Rep. Alan Grayson (D-Fla.) told HuffPost.
This will continue and get worse until either the system collapses under the sheer weight of the fraud and corruption or the Fed continues to cover-up the fraud by hyperinflating the currency.  I guess we ultimately collapse either way.  The least Obama could do is throw us a bone and get rid of Geithner.


  1. The presentation by Adrian Douglas to the CFTC is very impressive. I am now wondering if this meeting will represent some pivot point whereby Gold will be revalued.

    There is precedent as FDR did it and if a similiar multiple were employed Gold would go to $1900 by decree.

    Joe M.

  2. Dave have u ever read these posts by "another"?

    Here is a nice quote being played out now, "Watch closely as the world currencies and markets fall one by one. Watch in absolute wonder as the demand for oil plunges and it's price goes thru the roof." He said these words back in 1997! People must have takin him for a complete cook!

  3. Hey anliu. I was not even aware of "another." Thanks for the link. I'm going to go thru that archive on the site. Look forward to perusing it. Great find.

  4. By the way, when I told people back in 2002-2003 that real estate would dump at least 50% from whever it peaks, that gold was going to go a lot higher, that this country would eventually run into massive financial problems - everyone I know thought I was nuts/insane.

    I sold my house in late 2004 and everyone in my community said I sold too low and too soon. I might have been able to squeeze another 10% out it, but right now if it were to go on the market, I bet I could buy it back at least 25% below the price I sold.

  5. Joe, I have zero expectations from Thursday's CFTC hearing other than that it is giving GATA a lot of awesome attention. It's incredible how many high-profile news organizations are contacting Bill and giving him interviews. Last night I helped him come up with some "buzz-word" filled phrases that can be used to communicate GATA's message effectively when making statements to the press.

    Regardless of what happens Thursday, this has been an unprecedented venue for GATA to spread its story. But I think it would be unrealistic to believe that Gensler, an ex-GOldman executive, would ever implement any reform on the CFTC other than to make it easier for the big banks to manipulate and harder for the hedge funds to take large positions - that's exactly what he did with energy contracts.

    Based on chatting to potential investors, I would conclude that a few more people are starting to understand what's really going and why gold is the only way to preserve what you got.

  6. Dave,

    I sent the same thing to Bill Murphy about a possible Gold revaluation and he sent me this back, which verifies what you said about the good publicity GATA is now getting.

    Hi Joe
    No matter what the CFTC does, this trip will be a TEN for GATA.
    All the best

    Personally, I am of the opinion that there has been such a huge build up of negative-Karmic energy surrounding Gold and Silver there has to be some type of release. And not like the slow motion bleed we have seen over the past decade.

    Joe M.

  7. I've never seen Murphy so focused. And not because he thinks the CFTC will do anything but because it's helping to spread GATA's message at the highest levels of financial media. Even CNBC Asia is interviewing him now.

  8. @Dave:


    FOFOA- friend of friend of Another

    FOFOA takes on where Another left off....FOFOA explains what Another was talking about

  9. Thanks for the link. I've been to that blog before, but now it has new meaning. I had no idea what the title was all about.

    I agree w/his latest post, for sure.